-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, dgyal2AW/P7j+EV1b0XiSdoVVq0PqATNdIUWQxy3ocWN6ipklsrAX2knBRkS/y9M XVe6k8I6t2rNJdoMvkpMog== 0000912057-94-001353.txt : 19940415 0000912057-94-001353.hdr.sgml : 19940415 ACCESSION NUMBER: 0000912057-94-001353 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19940414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICHAELS STORES INC CENTRAL INDEX KEY: 0000740670 STANDARD INDUSTRIAL CLASSIFICATION: 5945 IRS NUMBER: 751943604 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 033-52311 FILM NUMBER: 94522638 BUSINESS ADDRESS: STREET 1: 5931 CAMPUS CIRCLE DR CITY: IRVING STATE: TX ZIP: 75063 BUSINESS PHONE: 2145808242 MAIL ADDRESS: STREET 1: PO BOX 619566 CITY: DFW STATE: TX ZIP: 75261 S-3/A 1 FORM S-3/A As filed with the Securities and Exchange Commission on April 14, 1994 Registration No. 33-52311 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ----------------- MICHAELS STORES, INC. (Exact name of registrant as specified in its charter) DELAWARE 75-1943604 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 5931 CAMPUS CIRCLE DRIVE IRVING, TEXAS 75063 P.O. BOX 619566 DFW, TEXAS 75261-9566 (214) 580-8242 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) JACK E. BUSH 5931 CAMPUS CIRCLE DRIVE IRVING, TEXAS 75063 (214) 580-8242 (Name, address, including zip code, and telephone number, including area code, of agent for service) ---------------- Copies to: MARK V. BEASLEY, ESQ. CHARLES D. MAGUIRE, JR., ESQ. MICHAELS STORES, INC. JACKSON & WALKER, L.L.P. P.O. Box 619566 901 Main Street Dallas, Texas 75261-9566 Suite 6000 Dallas, Texas 75202 ---------------- Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] ---------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine. PROSPECTUS 280,000 Shares MICHAELS STORES, INC. Common Stock This Prospectus relates to the offer and sale of an aggregate of 280,000 shares of common stock, par value $0.10 per share (the "Common Stock") of Michaels Stores, Inc. (the "Company"), by certain stockholders of the Company (the "Selling Stockholders"). The Selling Stockholders directly, through agents designated from time to time, or through dealers or underwriters also to be designated, may sell the Common Stock from time to time on terms to be determined at the time of sale. To the extent required, the specific number of shares of Common Stock to be sold, the names of the Selling Stockholders, the purchase price, the public offering price, the names of any such agent, dealer or underwriter, and any applicable commission or discount with respect to a particular offer will be set forth in an accompanying Prospectus Supplement. See "Plan of Distribution." The Common Stock is quoted through the National Association of Securities Dealers Automated Quotation ("NASDAQ") National Market System and may be sold from time to time by the Selling Stockholders either directly in private transactions, or through one or more brokers or dealers through NASDAQ at such prices and upon such terms as may be obtainable. Upon any sale of the Common Stock offered hereby, Selling Stockholders and participating agents, brokers or dealers may be deemed to be underwriters as that term is defined in the Securities Act of 1933, as amended (the "Securities Act"), and commissions or discounts or any profit realized on the resale of such securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The Company, however, understands that the Selling Stockholders do not admit that they are underwriters within the meaning of the Securities Act. The Company will not receive any of the proceeds from the sales of the securities offered hereby. No underwriter is being utilized in connection with this offering. The Company will pay all expenses incurred in connection with this offering, which are estimated to be approximately $43,000. On April 12, 1994, the closing price of the Common Stock on NASDAQ was $42 3/4. ---------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------------- The date of this Prospectus is April , 1994. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices in Chicago, Illinois (Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60604) and New York, New York (7 World Trade Center, 13th Floor, New York, New York 10007). Copies of such material can also be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. This Prospectus, which constitutes part of a Registration Statement filed by the Company with the Commission under the Securities Act (the "Registration Statement"), omits certain of the information contained in the Registration Statement. Reference is made to the Registration Statement and to the exhibits thereto for further information with respect to the Company and the Common Stock offered hereby. Copies of such Registration Statement are available from the Commission. Statements contained herein concerning the provisions of documents filed herewith as exhibits are necessarily summaries of such documents, and each such statement is qualified in its entirety by reference to the copy of the applicable document filed with the Commission. The Company's principal executive offices are located at 5931 Campus Circle Drive, Irving, Texas, its mailing address is P.O. Box 619566, DFW, Texas 75261- 9566, and its telephone number at such address is (214) 580-8242. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed with the Commission by the Company, are incorporated herein by reference and made a part hereof: (i) Annual Report on Form 10-K for the year ended January 31, 1993; (ii) definitive proxy statement, dated April 29, 1993, relating to the Company's Annual Meeting of Shareholders held on June 8, 1993; (iii) Quarterly Report on Form 10-Q for the quarter ended May 2, 1993; (iv) Quarterly Report on Form 10-Q for the quarter ended August 1, 1993; (v) Quarterly Report on Form 10-Q for the quarter ended October 31, 1993 and (vi) Registration Statement on Form 8-A (No. 0- 11822) effective as of September 11, 1991. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of Common Stock to be made hereunder shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing thereof. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for all purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide, without charge, to each person to whom a copy of this Prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the documents incorporated herein or in the Registration Statement by reference (other than 2 exhibits and schedules thereto, unless such exhibits or schedules are specifically incorporated by reference into the information that this Prospectus incorporates). Written or telephonic requests for copies should be directed to the Company's principal office: Michaels Stores, Inc., P.O. Box 619566, DFW, Texas 75261-9566, Attention: Investor Relations, (214) 580-8242. USE OF PROCEEDS The Company will not receive any proceeds from the sale of the Common Stock offered hereby. SELLING STOCKHOLDERS This Prospectus covers the offer and resale from time to time by each Selling Stockholder of the Common Stock owned by each such Selling Stockholder. Set forth below are the names of each Selling Stockholder, the nature of any position, office, or other material relationship that the Selling Stockholder has had within the past three years with the Company or any of its predecessors or affiliates, the number of shares of Common Stock owned as of February 14, 1994, by each Selling Stockholder, the number of shares of Common Stock that may be offered and sold by such Selling Stockholder pursuant to this Prospectus and the number of shares of Common Stock, the amount and (if one percent or more) the percentage of Common Stock to be owned by each Selling Stockholder upon completion of the offering if all such shares are sold. Any or all of the shares of Common Stock listed below may be offered for sale by the Selling Stockholders from time to time.
Common Stock Beneficial Beneficial Offered for Ownership of Ownership of Selling Common Percent of Common Stock Stockholders' Stock After Class after Name Prior to Offering Account Offering Offering - ---- ----------------- ------- -------- -------- Marc L. Abramowitz (1) 142,800 142,800 0 * Matthew Abramowitz (2) 89,600 89,600 0 * Edward K. Baker (3) 14,000 14,000 0 * William T. Gilbert (4) 5,600 5,600 0 * Michael F. Solomon 2,800 2,800 0 * Marc L. Abramowitz Irrevocable Trust Number 5--Treasure House Stores, Inc. for His Children and Their Descendants (5) 25,200 25,200 0 * ____________________________________ *Indicates shares held are less than 1% of class.
3 (1) Former consultant and director of business planning and strategy for Treasure House Stores, Inc., a Delaware corporation ("Treasure House"), a recently acquired wholly owned subsidiary of the Company and former holder of more than 10% of the then outstanding common stock of Treasure House. (2) Former director, vice president, assistant secretary and assistant treasurer of Treasure House and former holder of more than 10% of the then outstanding common stock of Treasure House. (3) Former director, president and chief operating officer of Treasure House. (4) Former director, chief financial officer, secretary and treasurer of Treasure House. (5) The Marc L. Abramowitz Irrevocable Trust Number 5 -- Treasure House Stores, Inc. for His Children and Their Descendants (the "Trust") is a trust formed under the laws of the District of Columbia; Michael F. Solomon is the Trust's trustee, which is for the benefit of Marc L. Abramowitz's children and their descendants.
In February 1994, the Company acquired (the "Acquisition") all of the outstanding stock of Treasure House. Pursuant to the Acquisition, each Selling Stockholder, which prior to the Acquisition was a stockholder of Treasure House, received the shares of Common Stock referred to in the table above. In connection with the Acquisition, the Company has agreed to register for sale under the Securities Act all shares of Common Stock acquired by the Selling Stockholders pursuant to the Acquisition. [Intentionally Left Blank] 4 PLAN OF DISTRIBUTION The Common Stock offered hereby may be sold from time to time to purchasers directly by any of the Selling Stockholders. Alternatively, the Selling Stockholders may from time to time offer the Common Stock through underwriters, dealers or agents who may receive compensation in the form of underwriting discounts, concessions or commissions from the Selling Stockholders and/or the purchasers of the Common Stock for whom they may act as agent. The Selling Stockholders and any underwriters, dealers or agents that participate in the distribution of the Common Stock may be deemed to be underwriters, and any profit on the sale of the Common Stock by them and any discounts, commissions or concessions received by any such underwriters, dealers or agents might be deemed to be underwriting discounts and commissions under the Securities Act. The Company, however, understands that the Selling Stockholders do not admit that they are underwriters within the meaning of the Securities Act. At the time a particular offer of the Common Stock is made, to the extent required, a Prospectus Supplement will be distributed, which will set forth the number of shares of Common Stock being offered and the terms of the offering, including the name or names of any underwriters, dealers or agents, any discounts, commissions and other items constituting compensation from the Selling Stockholders and any discounts, commissions or concessions allowed or reallowed or paid to dealers. The Common Stock may be sold from time to time in one or more transactions at fixed offering prices, which may be changed, or at varying prices determined at the time of sale or at negotiated prices. The Company will pay all of the expenses incident to the offering and sale of the Common Stock to the public other than commissions and discounts of underwriters, dealers or agents, brokers' fees and the fees and expenses of any counsel to the Selling Stockholders related thereto. LEGAL MATTERS Certain legal matters in connection with the validity of the securities offered hereby have been passed upon for the Company by Jackson & Walker, L.L.P., Dallas, Texas. Michael C. French, a partner in Jackson & Walker, L.L.P., is a director of the Company. EXPERTS The consolidated financial statements of Michaels Stores, Inc., incorporated by reference in the Company's Annual Report (Form 10-K) for the year ended January 31, 1993 have been audited by Ernst & Young, independent auditors, as set forth in their report thereon incorporated by reference therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 5 - -------------------------------------- ------------------------------------- - -------------------------------------- ------------------------------------- No person has been authorized to give any information or to make any representation other than those contained in this Prospectus, and if given or made, such information or representations must not be relied upon. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than registered securities to which it relates, or an offer to or a solicitation of any person in any jurisdiction where such offer or solicitation would be unlawful. The delivery of this Prospectus at any time does not imply that the information herein is correct as of any date subsequent to its date. MICHAELS STORES, INC. PROSPECTUS _________________ April , 1994 TABLE OF CONTENTS Page Available Information. . . . . . . . 2 Incorporation of Certain Documents by Reference . . . . . . 2 Use of Proceeds. . . . . . . . . . . 3 Selling Stockholders . . . . . . . . 3 Plan of Distribution . . . . . . . . 5 Legal Matters. . . . . . . . . . . . 5 Experts. . . . . . . . . . . . . . . 5 - -------------------------------------- ------------------------------------- - -------------------------------------- ------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The estimated expenses to be incurred in connection with the issuance and distribution of the Common Stock covered by this Registration Statement, all of which will be paid by Michaels Stores, Inc. (the "Registrant"), are as follows: Registration Fees. . . . . . . . . . $ 3,344 Accounting Fees and Expenses . . . . 30,000 Legal Fees and Expenses. . . . . . . 5,000 Miscellaneous. . . . . . . . . . . . 4,656 ------- Total . . . . . . . . . . . . . . . $43,000 -------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law empowers a corporation to indemnify its directors and officers or former directors or officers and to purchase insurance with respect to liability arising out of their capacity or status as directors and officers. Such law provides further that the indemnification permitted thereunder shall not be deemed exclusive of any other rights to which the directors and officers may be entitled under the corporation's certificate of incorporation, bylaws, any agreement or otherwise. Reference is made to Article Nine of the Registrant's Restated Certificate of Incorporation, as amended, Exhibit 3.1 of this Registration Statement, which provides for indemnification of directors and officers. Reference is made to Article IX of the Registrant's Amended Bylaws, Exhibit 3.2 to this Registration Statement, which provides for indemnification of directors and officers. In addition, the Registrant has entered into Indemnity Agreements with certain of its directors and executive officers. The Registrant has procured insurance that purports (i) to insure it against certain costs of indemnification that may be incurred by it pursuant to the provisions referred to above or otherwise and (ii) to insure the directors and officers of the Registrant against certain liabilities incurred by them in the discharge of their functions as directors and officers except for liabilities arising from their own malfeasance. II-1 ITEM 16. EXHIBITS. The following is a list of all exhibits filed as a part of this Registration Statement on Form S-3, including those incorporated herein by reference. Exhibit Number Description of Exhibit - -------- ---------------------- 1 None. 2.1 Stock Purchase Agreement, dated as of February 16, 1994, among Michaels Stores, Inc., Treasure House Stores, Inc. and the stockholders of Treasure House Stores, Inc. (2) 2.2 Amendment No. 1 to Stock Purchase Agreement. (1) 3.1 Restated Certificate of Incorporation of Michaels Stores, Inc. (3) 3.2 Bylaws of Michaels Stores, Inc. as amended. (4) 4.1 Form of Common Stock Certificate. (5) 4.2 Common Stock and Warrant Agreement dated as of October 16, 1984 between Michaels Stores, Inc. and Peoples Restaurants, Inc., including form of Warrant. (6) 4.3 First Amendment to Common Stock and Warrant Agreement dated October 31, 1984 between The First Dallas Group, Ltd. and Michaels Stores, Inc. (6) 4.4 Second Amendment to Common Stock and Warrant Agreement dated November 28, 1984 between First Dallas Investments-Michaels I, Ltd. and Michaels Stores, Inc. (6) 4.5 Third Amendment to Common Stock and Warrant Agreement dated February 27, 1985 between First Dallas Investments-Michaels I, Ltd., The First Dallas Group, Ltd., Sam Wyly, Charles J. Wyly, Jr. and Michaels Stores, Inc. (4) 4.6 Amendment to Common Stock and Warrant Agreement dated September 1, 1992 between Michaels Stores, Inc., The Andrew David Sparrow Wyly Trust, Charles J. Wyly, Jr., The Martha Caroline Wyly Trust, The Charles Joseph Wyly, III Trust, The Emily Ann Wyly Trust, The Jennifer Lynn Wyly Trust, Donald R. Miller, Jr., Evan A. Wyly, The Laurie Louise Wyly Trust, The Lisa Lynn Wyly Trust, The Sam Wyly and Rosemary Wyly Children's Trust No. 1 of 1965 fbo Kelly Wyly and Tallulah, Ltd. (3) 4.7 Michaels Stores, Inc. Key Employee Stock Compensation Program, effective February 25, 1992. (3) II-2 5 Opinion of Jackson & Walker. (2) 8 None. 12 None. 15 None. 23.1 Consent of Ernst & Young. (1) 23.2 Consent of Jackson & Walker. (7) 26 None. 27 None. 28 None. ____________ (1) Filed herewith. (2) Previously filed. (3) Previously filed as an exhibit to the Registrant's Registration Statement on Form S-8 (No. 33-54726) and incorporated herein by reference. (4) Previously filed as an Exhibit to the Registrant's Registration Statement on Form S-1 (No. 33-9456) and incorporated herein by reference. (5) Previously filed as an exhibit to the Registrant's Registration Statement on Form S-1 (No. 2-89370) and incorporated herein by reference. (6) Previously filed as an exhibit to the Registrant's Report on Form 10-K for the year ended January 31, 1993 and incorporated herein by reference. (7) Included in the opinion of Jackson & Walker, L.L.P., previously filed. (8) Included in the signature pages hereto. II-3 ITEM 17. UNDERTAKINGS. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the II-4 Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irving, State of Texas on the 13th day of April, 1994. MICHAELS STORES, INC. By: /s/ Jack E. Bush ------------------------------- Name: Jack E. Bush ------------------------------- Title: President and Chief Operating Officer II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signatures Title Date ---------- ----- ---- Chairman of the /s/ Sam Wyly* Board of Directors and April 13, 1994 - -------------------------- Chief Executive Officer Sam Wyly (Principal Executive Officer) /s/ Charles J. Wyly, Jr.* Vice Chairman of the - -------------------------- Board of Directors April 13, 1994 Charles J. Wyly, Jr. /s/ Jack E. Bush* President, Chief Operating - -------------------------- Officer and Director April 13, 1994 Jack E. Bush /s/ William O. Hunt* - -------------------------- Director April 13, 1994 William O. Hunt - -------------------------- Director , 1994 Richard E. Hanlon II-7 - -------------------------- Director , 1994 F. Jay Taylor /s/ Michael C. French* - -------------------------- Director April 13, 1994 Michael C. French Vice President- - -------------------------- Mergers and Investments, , 1994 Evan A. Wyly and Director /s/ Donald R. Miller, Jr.* Vice President- - -------------------------- Market Development, April 13, 1994 Donald R. Miller, Jr. and Director Executive Vice President /s/ R. Don Morris* and Chief Financial Officer - -------------------------- (Principal Financial and April 13, 1994 R. Don Morris Accounting Officer) *By: /s/ Mark V. Beasley - -------------------------- Mark V. Beasley Attorney-in-Fact II-8 INDEX TO EXHIBITS Exhibit Number Description of Exhibit - ------- ---------------------- 2.2 Amendment No. 1 to Stock Purchase Agreement. 23.1 Consent of Ernst & Young. EX-2.2 2 EXHIBIT 2.2 EXHIBIT 2.2 Amendment No. 1 to Stock Purchase Agreement AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT THIS AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT (the "Amendment"), dated as of February 22, 1994, among Treasure House Stores, Inc., a Delaware corporation (the "Company"), the holders of all of the outstanding capital stock of the Company (collectively, the "Shareholders"), Michaels Stores, Inc., a Delaware corporation ("Michaels") and THSI Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of Michaels ("Newco"); W I T N E S S E T H: WHEREAS, the Company, the Shareholders and Michaels entered into that certain Stock Purchase Agreement dated as of February 16, 1994 (the "Stock Purchase Agreement"); and WHEREAS, Section 2.03 of the Stock Purchase Agreement provides, in essence, that, at the reasonable request of the Shareholders, so long as there is no adverse impact on Michaels, the transaction contemplated by the Stock Purchase Agreement can be effected by merger of a wholly-owned subsidiary of Michaels with and into the Company in a transaction designed to qualify as a tax free reorganization under Code Section 368; and WHEREAS, Section 2.03 of the Stock Purchase Agreement provides further, in essence, that, upon such request, the parties will execute an amendment to the Stock Purchase Agreement and such other documents as necessary to consummate the proposed transaction as a merger; and WHEREAS, the Shareholders have made such a request of Michaels and Michaels has agreed to consummate the proposed transaction as a merger and this Amendment is intended to amend the Stock Purchase Agreement; and WHEREAS, the Boards of Directors of the Company, Michaels and Newco have determined that a business combination among the Company and Newco is in the best interests of their respective companies and stockholders upon the terms and subject to the conditions set forth herein; and WHEREAS, it is intended that for federal income tax purposes, the Merger (as defined below shall qualify as a reorganization within the meaning of Code Section 368; and WHEREAS, the Board of Directors of the Company has directed that this Amendment be submitted to the Shareholders for their approval, and Michaels as sole stockholder of Newco has approved this Agreement by written consent; and WHEREAS, the Shareholders have approved the Merger, and have agreed to vote their shares of capital stock in the Company in favor of the Merger; NOW, THEREFORE, in consideration of the mutual representa- tions, warranties and covenants herein contained, and on the terms and subject to the conditions herein set forth, the parties hereto hereby agree as follows: 1. DEFINED TERMS. Unless otherwise indicated herein, all defined terms used in this Agreement shall have the same meaning as set forth in the Stock Purchase Agreement. 2. AMENDMENT OF SECTION 1.01. DEFINITIONS. Section 1.01 of the Stock Purchase Agreement is hereby amended to add or modify, as appropriate, the following definitions in the appropriate locations: "Certificate" shall have the meaning set forth in Section 2.08(c). "DGCL" shall have the meaning set forth in Section 2.01. "Effective Time" shall have the meaning set forth in Section 2.03. "Exchange Agent" shall have the meaning set forth in Section 2.09(a). "Exchange Fund" shall have the meaning set forth in Section 2.09(a). "Expiration Date" shall have the meaning set forth in Section 7.18. "Merger" shall have the meaning set forth in Section 2.01. "Surviving Corporation" shall have the meaning set forth in Section 2.01. 3. AMENDMENT OF ARTICLE II PURCHASE AND SALE. Article II of the Stock Purchase Agreement is hereby deleted in its entirety and a new Article II is hereby added to the Stock Purchase Agreement which shall read in full as follows: SECTION 2.01. THE MERGER. Subject to the terms and conditions of this Agreement, at the Effective Time (as defined in Section 2.03), Newco shall be merged with and into the Company in accordance with this Agreement and the separate corporate existence of Newco shall thereupon cease (the "Merger"). The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the "Surviving Corporation") and shall continue to be governed by the laws of the State of Delaware; the separate corporate existence of the Company with all its rights, privileges, powers, immunities, purposes and franchises shall continue unaffected by the Merger, except as set forth herein. The Merger shall have the effects specified in the Delaware General Corporation Law (the"DGCL"). 2 SECTION 2.02. THE CLOSING. The Closing shall take place on the Closing Date, or such other date as the parties may mutually agree. SECTION 2.03. EFFECTIVE TIME. If all the conditions to the Closing set forth in Articles IX and X shall have been fulfilled or waived in accordance herewith and this Agreement shall not have been terminated in accordance with Article XIV, the parties hereto shall cause a Certificate of Merger meeting the requirements of Section 251 of the DGCL to be properly executed and filed in accordance with such Section on the Closing Date. The Merger shall become effective at the time of the filing of the Certificate of Merger in accordance with the DGCL or at such later time which the parties hereto have agreed upon and designated in such filing as the effective time of the Merger (the "Effective Time"). SECTION 2.04. CERTIFICATE OF INCORPORATION OF SURVIVING CORPORATION. Effective at the Effective Time, the Certificate of Incorporation of the Company shall be the Certificate of Incorporation of the Surviving Corporation. SECTION 2.05. BYLAWS OF SURVIVING CORPORATION. The Bylaws of Newco in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation, until duly amended in accordance with their terms and the DGCL. SECTION 2.06. DIRECTORS OF THE SURVIVING CORPORATION. The persons who are directors of Newco immediately prior to the Effective Time shall, from and after the Effective Time, be and become directors of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Corporation's Certificate of Incorporation and Bylaws. SECTION 2.07. OFFICERS OF THE SURVIVING CORPORATION. The officers of Newco shall continue as officers of the Surviving Corporation until their resignation or removal. SECTION 2.08. CONVERSION SHARES. The manner of converting shares of the Company and Newco in the Merger shall be as follows: (a) At the Effective Time, each share of Stock issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into the right to receive such number of shares of Michaels Common Stock as set forth on Exhibit A attached hereto. The total number of shares of Michaels Common Stock to be issued as a result of this Agreement is 280,000 shares (the "Michaels Stock Consideration"). 3 (b) As a result of the Merger and without any action on the part of the holder thereof, all shares of Stock shall cease to be outstanding and shall be cancelled and retired and shall cease to exist, and each holder of a certificate (a "Certificate") representing any shares of Stock shall thereafter cease to have any rights with respect to such shares of Stock, except the right to receive, without interest, the Michaels Common Stock in accordance with Section 2.08(a) upon the surrender of such Certificate. (c) At the Effective Time, each share of common stock, par value $.01 per share, of Newco issued and outstanding immediately prior to the Effective Time as a result of the Merger shall be converted and exchanged for one newly and validly issued, fully paid and nonassessable share of Common Stock of the Surviving Corporation. SECTION 2.09. EXCHANGE OF CERTIFICATES REPRESENTING SHARES. (a) As of the Effective Time, Michaels shall at the expense of Michaels, make available, or shall cause to be made available, with an exchange agent selected by Michaels, which shall be Michaels' Transfer Agent (the "Exchange Agent"), for the benefit of the Shareholders, and in the amounts listed on Exhibit A, certificates representing a sufficient number of shares of Michaels Common Stock necessary for the Exchange Agent to make deliveries pursuant to Section A hereof (such certificates for shares of Michaels Common Stock, together with the amount of any dividends or distributions with respect thereto, being hereinafter referred to as the "Exchange Fund") in exchange for outstanding Shares. (b) Promptly after the Effective Time, Michaels shall cause the Exchange Agent to deliver to the Shareholders shown on Exhibit A or their proxy, in exchange for Certificates from such Shareholders and a duly executed letter of transmittal in the form attached hereto as Exhibit B, that number of shares of Michaels Common Stock and unpaid dividends and distributions, if any, which such holder has the right to receive in respect of the Certificate surrendered pursuant to the provisions of this Article II, after giving effect to any required tax withholdings, and the Certificate so surrendered shall forthwith be cancelled. No interest will be paid or accrued on the amount payable upon surrender of Certificates except in the event of unreasonable delay by Michaels. (c) Notwithstanding any other provisions of this Agreement, no dividends on Michaels Common Stock shall be paid with respect to any shares of Stock until the Certificate representing such shares of Stock is surrendered for exchange as provided herein. Subject to the effect of applicable laws, following surrender of any such Certificate, there shall be paid to the holder of certificates representing shares of Michaels Common Stock issued in exchange therefor, 4 without interest, (i) at the time of such surrender, the amount of dividends or other distributions, if any, with a record date after the Effective Time theretofore payable with respect to such shares of Michaels Common Stock and not paid, less the amount of any withholding taxes that may be required thereon, and (ii) at the appropriate payment date, the amount of dividends or other distributions, if any, with a record date after the Effective Time but prior to surrender thereof and a payment date subsequent to surrender thereof payable with respect to such shares of Michaels Common Stock, less the amount of any withholding taxes which may be required thereon. (d) At or after the Effective Time, there shall be no transfers on the stock transfer books of the Company of shares of Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation, they shall be cancelled and exchanged for certificates for shares of Michaels Common Stock in accordance with the procedures set forth in this Article II. (e) Any portion of the Exchange Fund (including the proceeds of any investments thereof and any shares of Michaels Common Stock) that is unclaimed by the former stockholders of the Company during the one year period after the Effective Time shall be delivered to the Surviving Corporation. Any former stockholders of the Company who have not theretofore complied with this Article II shall thereafter look to the Surviving Corporation only as general creditors for payment of their shares of Michaels Common Stock, and unpaid dividends and distributions on shares of Michaels Common Stock, deliverable in respect of each share of Stock such stockholder holds as determined pursuant to this Agreement, in each case without any interest thereon. (f) None of the Company, Michaels, the Surviving Corporation, Newco, the Exchange Agent or any other person shall be liable to any former holder of shares of Stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws. (g) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such person of a bond in such reasonable amount as the Surviving Corporation may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate shares of Michaels Common Stock, and unpaid dividends and distributions on shares of Michaels Common Stock as provided in Section 2.09(c), deliverable in respect thereof pursuant to this Agreement. 5 SECTION 2.10. EXCHANGE OF CERTIFICATES REPRESENTING SHARES. In the event that between the date of this Agreement and the Effective Time, Michaels changes the number of shares of Michaels Common Stock issued and outstanding as a result of a stock split, reverse stock split, stock dividend, recapitalization or other similar transaction, the exchange amounts set forth in Exhibit A shall be appropriately adjusted. SECTION 2.11. SUBSEQUENT ACTIONS. If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of any of the Company or Newco acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger or otherwise to carry out this Agreement, and to effect the cancellation of all outstanding shares of Stock in return for the consideration set forth in this Agreement, the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf of each of the Company, each of the Shareholders and Newco or otherwise, to carry out all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of each of the Company and Newco or otherwise, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Surviving Corporation or otherwise to carry out this Agreement. 4. ADDITION OF SECTION 7.17. REQUIREMENTS TO EFFECT MERGER. A new Section 7.17 is hereby added to the Stock Purchase Agreement, which shall read as follows: SECTION 7.17. REQUIREMENTS TO EFFECT MERGER. The Company and the Shareholders shall use their best efforts to take, or cause to be taken, all actions necessary to effect the Merger under the DGCL, including without limitation the filing with the Secretary of State of Delaware of a Certificate of Merger in a form approved by counsel for the parties to this Agreement. 5. ADDITION OF SECTION 7.18. VOTING OF SHARES; IRREVOCABLE PROXY. A new Section 7.18 is hereby added to the Stock Purchase Agreement, which shall read as follows: SECTION 7.18. VOTING OF SHARES; IRREVOCABLE PROXY. Each Shareholder agrees that until the earlier of (i) the Effective Time and (ii) the termination of the Stock Purchase Agreement (the earliest of such dates being hereinafter referred to as the "Expiration Date"), each Shareholder shall vote all shares of Stock owned by the Shareholder at any meeting of the Company's stockholders (whether annual or special and whether or not an adjourned or postponed meeting), or, if applicable, take action by written consent (x) for adoption of the 6 Stock Purchase Agreement, as hereby amended, and in favor of the Merger and any other transactions contemplated by the Stock Purchase Agreement, as hereby amended and as such Stock Purchase Agreement may be further modified or amended from time to time and (y) against any action, omission or agreement which would impede or interfere with, or have the effect of discouraging, the Merger, including, without limitation, any acquisition proposal other than the Merger. Any such vote shall be cast or consent shall be given in accordance with such procedures relating thereto as shall ensure that it is duly counted for purposes of determining that a quorum is present and for purposes of recording the results of such vote or consent. In the event that any Shareholder shall fail to comply with the provisions of this Section 7.18 (as determined by Michaels in its sole discretion), such Shareholder hereby agrees that such failure shall result, without any further action by the Shareholder, in the irrevocable appointment of Michaels, until termination of the Stock Purchase Agreement, as its attorney and proxy pursuant to the provisions of Section 212(e) of the DGCL, with full power of substitution, to vote and otherwise act (by written consent or otherwise) with respect to the Stock which the Shareholder is entitled to vote at any meeting of stockholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting) or consent in lieu of any such meeting or otherwise, on the matters and in the manner specified in this Section 7.18. EACH SHAREHOLDER ACKNOWLEDGES THAT THIS PROXY IS COUPLED WITH AN INTEREST, AND CONSTITUTES, AMONG OTHER THINGS, AN INDUCEMENT FOR THE BUYER TO ENTER INTO THE STOCK PURCHASE AGREEMENT AND THIS AGREEMENT, IS IRREVOCABLE AND SHALL NOT BE TERMINATED BY OPERATION OF LAW UPON THE OCCURRENCE OF ANY EVENT, INCLUDING, WITHOUT LIMITATION, THE DEATH OR INCAPACITY OF THE SHAREHOLDER. Notwithstanding any provision contained in such proxy, such proxy shall terminate upon the Expiration Date. 6. ADDITION OF SECTION 8.03. REQUIREMENTS TO EFFECT MERGER. A new Section 8.03 is hereby added to the Stock Purchase Agreement, which shall read as follows: SECTION 8.03. REQUIREMENTS TO EFFECT MERGER. Michaels will use its best efforts to take, or cause to be taken, all actions necessary to effect the Merger under the DGCL, including without limitation the filing with the Secretary of State of the State of Delaware of a Certificate of Merger, in a form approved by counsel for the parties to this Agreement. 7. ADDITION OF SECTION 9.10. SHAREHOLDER CONSENT. A new Section 9.10 is hereby added to the Stock Purchase Agreement, which shall read as follows: 7 SECTION 9.10. SHAREHOLDER CONSENT. The Merger pursuant to this Agreement and this Agreement shall have been approved in the manner required by law by the Shareholders. 8. AMENDMENT OF PARAGRAPH 11.01(a). Paragraph 11.01(a) is hereby deleted in its entirety (other paragraphs of Section 11.01 remain unchanged). 9. ADDITION OF SECTION 11.03. DELIVERIES OF NEWCO. A new Section 11.03 is hereby added to the Stock Purchase Agreement, which shall read as follows: SECTION 11.03. DELIVERIES OF NEWCO. At the Closing, Newco shall deliver the following to the Company, the Shareholders or the appropriate party: (a) a copy of the resolutions of the Board of Directors of Newco authorizing the execution, delivery and performance of this Agreement, and all related documents and agreements, each certified by Newco's Secretary as being true and correct copies of the originals thereof subject to no modifications or amendments; (b) a certificate of the Secretary of Newco certifying as to the incumbency of the directors and officers of Newco and as to the signatures of such directors and officers who have executed documents delivered at the Closing on behalf of Newco; and (c) the certificate of incorporation of Newco, certified by the Secretary of State of Delaware. 10. AMENDMENT OF SECTION 12.01. INSTRUMENTS OF TRANSFER. Section 12.01 is hereby deleted in its entirety and a new Section 12.01 is hereby added to the Stock Purchase Agreement, which shall read in full as follows: SECTION 12.01. FURTHER INSTRUMENTS OF TRANSFER. Following the Closing, at the request of Michaels, the Shareholders shall deliver any further instruments of transfer and take all reasonable action as may be necessary or appropriate to (i) consummate the Merger and (ii) carry out more effectively the provisions of this Agreement and to establish and protect the rights created in favor of the parties hereunder or thereunder. 11. AMENDMENT OF SECTION 12.02. REGISTRATION; RE-SALE OF MICHAELS STOCK CONSIDERATION. Section 12.02 is hereby deleted in its entirety and a new Section 12.02 is hereby added to the Stock Purchase Agreement, which shall read in full as follows: SECTION 12.02. REGISTRATION; RE-SALE OF MICHAELS STOCK CONSIDERATION. As set forth in Section 8.02, Michaels shall use reasonable efforts to file the 8 Registration Statement with the SEC registering the sale of the Michaels Stock Consideration by the Shareholders from time to time in the open market. In connection with the disposition of the Michaels Stock Consideration under the Registration Statement, in order for the Shareholders to dispose of Michaels Stock Consideration with a prospectus that is a part of the Registration Statement, the Shareholders must give Michaels written notice of their intention to sell any of the Michaels Stock Consideration at least two (2) but not more than twenty (20) business days prior to the date of the proposed sale(s), which notice shall include the number of shares proposed to be disposed, whether the shares are to be sold in an underwritten offering and the time period during the forty-five (45) business days following the date of such notice during which the shares may be disposed (the "Sale Period"), and the Shareholders agree that, during each Sale Period, they shall not deliver any prospectus that is a part of the Registration Statement in connection with any disposition of Michaels Stock Consideration during any period of time when, but only so long as, Michaels, after receipt of the notice set forth above, notifies the Shareholders (a "Delay Notice") that Michaels is in possession of material non-public information that, in the exercise of its reasonable judgment based on the advice of its counsel, would be required to be disclosed in the Registration Statement (or any amendment, or post-effective amendment thereto) in order to comply with SEC requirements, which material information may relate, including, without limitation, to a financing project or a pending acquisition, merger or other material corporate reorganization to which Michaels is or is expected to be a party; provided that Michaels shall advise the Shareholders in writing as soon as any such delay is no longer applicable; provided further that the Shareholders shall only be prevented from disposing Michaels Stock Consideration with a prospectus under the Registration Statement for up to 90 consecutive days (a "Delay Period") following the receipt of a Delay Notice and any two Delay Periods must be at least 30 days apart during which time the Shareholders shall be permitted to dispose of Michaels Stock Consideration with a prospectus under the Registration Statement. 12. EFFECT OF AMENDMENTS. The Company, the Shareholders, Michaels and Newco hereby agree that any and all of the terms and provisions of the Stock Purchase Agreement, except as amended and modified hereby, remain in full force and effect. 13. MULTIPLE COUNTERPARTS. This Amendment may be executed in multiple counterparts, all of which, taken together, shall constitute one document. 9 IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be duly executed by their respective authorized officer on the day and year first above written. MICHAELS -------- MICHAELS STORES, INC. By: ----------------------------- Its: ----------------------------- NEWCO ----- THSI ACQUISITION CORPORATION By: ----------------------------- Its: ----------------------------- THE COMPANY ----------- TREASURE HOUSE STORES, INC. By: ------------------------------ Its: ------------------------------ 10 SHAREHOLDERS: ------------- ---------------------------------- Marc L. Abramowitz Address: ------------------------- ---------------------------------- ---------------------------------- Matthew Abramowitz Address: ------------------------- ---------------------------------- ---------------------------------- Edward K. Baker Address: ------------------------- ---------------------------------- ---------------------------------- William T. Gilbert Address: ------------------------- ---------------------------------- ---------------------------------- Michael F. Solomon Address: ------------------------- ---------------------------------- 11 MARC L. ABRAMOWITZ IRREVOCABLE TRUST NUMBER 5 - TREASURE HOUSE STORES, INC. FOR HIS CHILDREN AND THEIR DESCENDANTS By: ------------------------------ Trustee Address: ------------------------- ---------------------------------- 12 EX-23.1 3 EXHIBIT 23.1 EXHIBIT 23.1 Consent of Ernst & Young EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption Experts in Amendment No. 1 to the Registration Statement (Form S-3) and related Prospectus of Michaels Stores, Inc. for the registration of 280,000 shares of its common stock and to the incorporation by reference therein of our report dated February 26, 1993, with respect to the financial statements and our report dated April 29, 1993 with respect to the financial statement schedules of Michaels Stores, Inc. included or incorporated by reference in its Annual Report (Form 10-K) for the year ended January 31, 1993 filed with the Securities and Exchange Commission. ERNST & YOUNG Dallas, Texas April 12, 1994 -----END PRIVACY-ENHANCED MESSAGE-----